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DECREE

Providing for the handling of tax-law violations and the enforcement of tax-related administrative decisions

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 29, 2006 Law on Tax Administration;

Pursuant to the July 2, 2002 Ordinance on Handling of Administrative Violations;

At the proposal of the Finance Minister,

DECREES:

Chapter I

HANDLING OF TAX-LAW VIOLATIONS

Section 1. GENERAL PROVISIONS ON HANDLING OF TAX-LAW VIOLATIONS

Article 1.- Governing scope and subjects of application

1. Governing scope:

This Chapter provides for the principles, competence, violation acts, levels and measures of handling tax-law violations; the order and procedures for implementation of provisions on handling of tax-law violations under the provisions of the Law on Tax Administration and the law on handling of administrative violations.

Tax-law violations related to imported and exported goods shall be handled under separate regulations of the Government.

2. Subjects to be handled for tax-law violations include:

a/ Taxpayers who commit acts of violating tax law;

b/ Tax agencies and tax officers that violate tax law;

c/ Persons having competence and responsibility to handle tax-law violations;

d/ State agencies, other organizations and individuals that are involved in the handling of tax-law violations.

Article 2.- Principles for handling of tax-law violations

1. All acts of violating tax law must be detected and stopped immediately. Tax-law violations must be handled in a timely, public, transparent and resolute manner. All consequences caused by tax-law violations must be addressed in accordance with law.

2. Individuals and organizations shall be handled only when they commit acts of violating the tax law, which have been prescribed in laws, ordinances and legal documents on tax; violate the provisions of the Law on Tax Administration and this Decree.

3. An act of tax-law violation is sanctioned only once, specifically as follows:

a/ An act of tax-law violation for which a competent person has issued a sanctioning decision or made a record for sanctioning, shall not be recorded or decided for the second sanctioning. When the act of violation is still committed even though a competent person has issued a suspension order, it is regarded as an aggravating circumstance under Article 3 of this Decree;

b/ Where an act of tax-law violation shows signs of crime and the file thereon has been transferred for penal liability examination, but for which a decision on administrative sanctioning of tax violation was previously issued, the person who issued such sanctioning decision must cancel it; if the sanctioning decision is not yet issued, such act of tax-law violation is not sanctioned.

4. If many persons commit an act of tax-law violation, each violator shall be sanctioned for such act;

5. A person who commits many acts of tax-law violation shall be sanctioned for every act of violation.

6. Persons competent to handle tax-law violations shall base on the nature and severity of violations, personal records of violators, aggravating and extenuating circumstances to issue decisions to sanction every person committing the same act of tax-law violation.

Article 3.- Aggravating circumstances

1. Committing violations in an organized manner.

2. Committing violations persistently.

3. Repeating sanctioned tax-law violations within one year after the sanctioning decisions were completely served or expired.

4. Inciting or enticing minors to commit violations, forcing one's material and spiritual dependents to commit violations.

5. Committing violations in the state of intoxication due to the use of alcohol, beer or other stimulants.

6. Abusing positions or powers to commit violations.

7. Taking advantage of circumstances of war, natural disaster or other particular objective difficulties to commit violations.

8. Committing violations while serving criminal sentences or decisions to handle tax-law violations.

9. Continuing to commit violations even though competent persons have demanded the termination thereof.

10. Committing acts of shirking or covering up the committed acts of tax-law violation.

Article 4.- Extenuating circumstances

1. Violators have warded off or alleviated harms caused by their violations or addressed the consequences thereof, paid the damages.

2. Violators have voluntarily reported their violations, honestly accepted their errors and listed and adjusted the errors.

3. Violators are forced to commit violations or are material or spiritual dependents.

4. Violators are pregnant women, old and weak persons, minors aged between full 16 and under 18 years old, persons suffering from ailment or disability that has restricted their capacity to cognize or control their acts.

5. Committing violations in particularly difficult circumstances not caused by violators.

6. Committing violations due to failure to grasp tax policies and laws.

7. Committing violations in the state of being spiritually provoked by illegal acts of other persons.

Article 5.- Statutes of limitations for sanctioning of tax-law violations

1. For acts of violating the tax procedures, the statute of limitations for sanctioning is 2 years, counting from the date the violation acts are committed.

2. For acts of tax evasion or tax fraud which are not serious enough for penal liability examination, acts of delaying tax payment, declaring tax inadequately, the statute of limitations for sanctioning is 5 years, counting from the date the violation acts are committed.

The time for determining acts of tax evasion or tax fraud is the date following the deadline of submission of tax declaration dossiers of the tax calculation period in which the taxpayers commit acts of tax evasion or tax fraud or the date following the date the competent agencies issue decisions on tax refund, exemption or reduction.

3. For individuals against whom legal proceedings were instituted, taken or trial according to criminal procedures was decided, and later decisions to suspend the investigation or the cases were issued, but their violation acts show signs of tax-law violation, the agencies which have issued decisions to suspend the investigation or the cases shall, within 3 days after issuing such decisions, send the decisions and case files to the bodies competent to handle tax-law violations. For this case, the statute of limitations for sanctioning is 3 months, counting from the date the persons competent to handle tax-law violations receive the suspension decisions and case files.

4. If within the statute of limitations stated in Clauses 1, 2 and 3 of this Article, the taxpayers continue repeating the violations committed previously or deliberately shirk or obstruct the sanctioning, the statute of limitations stated in Clauses 1, 2 and 3 of this Article is not applied and the statute of limitations for sanctioning of tax-law violations is counted from the time the new violations are committed or the time the acts of shirking or obstructing the sanctioning terminate.

Article 6.- Forms of sanctioning tax-law violations

1. For every act of tax-law violation, the violating individuals or organizations are liable to one of the following sanctioning forms:

a/ Caution:

Caution is decided in writing and applied to:

- First-time violations or second-time violations involving extenuating circumstances, for less serious violations of tax procedures;

- Violations of tax procedures committed by minors aged between full 14 and under 16 years old.

b/ Fine:

Fine is specified for every act of tax-law violation as follows:

- Fine with an absolute sum of money for acts of violating the tax procedures, the maximum fine level must not exceed VND 100 million. The specific fine level for an act of violating the tax procedures is the average of the fine bracket set for such act; if extenuating circumstances are involved, the fine level may be reduced, but not lower than the minimum level of the fine bracket; if aggravating circumstances are involved, the fine level may be raised but not beyond the maximum level of the fine bracket;

- A fine of 0.05% of the late paid tax amount each day, for acts of delayed payment of tax or fine money;

- A fine of 10% of the outstanding tax amount, for acts of making false declarations which lead to lower payable tax amount or higher refunded tax amount;

- A fine corresponding to the money amount not remitted into state budget accounts, for violation acts defined at Point b, Clause 1, Article 114 of the Law on Tax Administration;

- A fine of one to three times the evaded tax amount, for acts of tax evasion or tax fraud.

Upon determination of fine levels against taxpayers who commit violations involving both aggravating circumstances and extenuating circumstances, the reduction of aggravating circumstances will be considered on the principle that an aggravating circumstance is reduced if there appear two extenuating circumstances. If after the reduction under the above principle, there still exist one aggravating circumstance and one extenuating circumstance, depending on the nature and severity of violations and the remedies taken by violators, the persons with handling competence will take into account the fine level applied to cases involving one aggravating circumstance or cases involving no aggravating circumstances and no extenuating circumstances. For acts of violating the tax procedures, each aggravating or extenuating circumstance will lead to an increase or decrease of 20% of the average fine level of the fine bracket.

2. Depending on the nature and severity of violations, organizations and individuals violating tax law may also be liable to the application of the additional sanctioning form of confiscation of material evidences and means used for commission of tax-law violations.

3. Remedies:

Apart from the sanctioning forms defined in this Article, taxpayers that violate provisions of Section 2 of this Chapter may also be liable to the application of following remedies:

a/ Compulsory full payment of the outstanding tax amounts, the evaded tax amounts or the fraudulent tax amounts into the state budget if the statute of limitations provided in Article 5 of this Decree has expired;

b/ Coerced destruction of invoices, vouchers and accounting books which are printed and distributed in contravention of provisions of law, excluding invoices, vouchers and accounting books which are material evidences and must be kept for use as proofs for handling of violations.

Section 2. SANCTIONING OF TAX-LAW VIOLATIONS COMMITTED BY TAXPAYERS

Article 7.- Sanctioning of acts of submitting tax registration dossiers, or notifying information changes later than schedule

1. Caution or a fine of between VND 100,000 and 1,000,000, for acts of submitting tax registration dossiers or notifying changes of information in tax registration dossiers to tax agencies from 10 to 20 days later than schedule.

2. A fine of between VND 200,000 and 2,000,000 for acts of submitting tax registration dossiers or notifying changes of information in tax registration dossiers to tax agencies more than 20 days later than schedule.

Article 8.- Sanctioning of acts of incompletely declaring the contents in tax dossiers

For acts of falsely or incompletely declaring the contents in tax declaration dossiers defined in Article 31 of the Law on Tax Administration (except the cases in which taxpayers can make additional declarations according to regulations), which are detected beyond the time limit set for submission of tax declaration dossiers:

1. Caution or a fine of between VND 100,000 and 1,000,000, for acts of making tax declaration dossiers with incomplete or false statement of details on the lists of goods, services purchased or sold or on other documents related to tax obligations.

2. Caution or a fine of between VND 150,000 and 1,500,000, for acts of making tax declaration dossiers with incomplete or false statement of details on invoices. economic contracts and vouchers related to tax obligations.

3. A fine of between VND 200,000 and 2,000,000, for acts of making tax declaration dossiers with incomplete or false statement of details on tax declaration forms or tax settlement forms.

4. A fine of between VND 500,000 and 3,000,000, for cases involving many violations defined in Clauses 1, 2 and 3 of this Article.

Article 9.- Sanctioning of acts of submitting tax declaration dossiers later than schedule

1. Caution or a fine of between VND 100,000 and 1,000,000, for acts of submitting tax declaration dossiers 5 to 10 days later than schedule.

2. A fine of between VND 200,000 and 2,000,000, for acts of submitting tax declaration dossiers over 10 to 20 days later than schedule.

3. A fine of between VND 300,000 and 3,000,000, for acts of submitting tax declaration dossiers over 20 to 30 days later than schedule.

4. A fine of between VND 400,000 and 4,000.000, for acts of submitting tax declaration dossiers over 30 to 40 days later than schedule.

5. A fine of between VND 500,000 and 5,000,000, for acts of submitting tax declaration dossiers over 40 to 90 days later than schedule.

6. The tax declaration dossier submission time limits specified in this Article also cover the extension of tax declaration dossier submission provided in Article 33 of the Law on Tax Administration.

7. The fine levels specified in this Article are not applicable to cases of extension of tax payment under the provisions of tax administration law.

Article 10.- Sanctioning of acts of violating the regulations on supply of information related to tax obligation determination

Acts of violating the regime of supplying information related to tax obligation determination other than the cases of inadequate tax declaration, tax evasion or tax fraud, shall, depending on such acts and severity of violation, be sanctioned as follows:

1. Caution or a fine of between VND 100,000 and 1,000,000, for one of the following acts:

a/ Supplying information, documents, legal records related to tax registration under notices of tax agencies 5 working days or more later than schedule;

b/ Supplying information, documents, accounting books related to tax obligation determination under notices of tax agencies 5 working days or more later than schedule;

c/ Falsely supplying information, documents or accounting books related to tax obligation determination later than the schedule required by tax agencies.

2. A fine of between VND 200,000 and 2,000,000, for one of the following acts:

a/ Inadequately or inaccurately supplying information, documents or accounting books related to tax obligation determination within the tax declaration duration; account numbers, deposit account balances to competent bodies, when so requested;

b/ Failing to supply adequate, accurate norms and figures related to tax obligations to be registered according to regulations, which are detected but do not reduce the obligations toward the state budget;

c/ Inadequately or inaccurately supplying information or documents related to deposit accounts at banks, other credit institutions or state treasuries within 3 working days after being so requested by tax agencies.

Article 11.- Sanctioning of acts of violating the provisions on compliance with decisions on tax examination or inspection, enforcement of tax-related administrative decisions and violating the regimes of invoices and vouchers for goods transported en route

1. A fine of between VND 200,000 and 2,000,000, for one of the following acts:

a/ Declining to receive decisions on tax examination or inspection, decisions on enforcement of tax-related administrative decisions;

b/ Failing to abide by decisions on tax examination or inspection, decisions on enforcement of tax-related administrative decisions within 3 working days, counting from the date of compliance with decisions of competent bodies;

c/ Rejecting, delaying or shirking the supply of dossiers, documents, invoices, vouchers, accounting books related to tax obligations within 6 working hours after the receipt of requests of competent bodies during tax examination or inspection at the head offices of taxpayers;

d/ Inaccurately supplying information, documents, accounting books related to tax obligation determination at the request of competent bodies during tax examination or inspection at the head offices of taxpayers.

2. A fine of between VND 500,000 and 5,000,000, for one of the following acts:

a/ Failing to supply figures, documents, accounting books related to tax obligation determination when so requested by competent bodies during the tax examination or inspection at the head offices of taxpayers;

b/ Failing to execute or improperly executing decisions on sealing off dossiers, safes, warehouses of goods, supplies, raw materials, machinery, equipment, workshops, which serve as bases for verification of tax obligations;

c/ Arbitrarily removing or altering seals legally established by competent bodies as bases for verification of tax obligations;

d/ Declining to sign examination or inspection records within 5 working days after the end of examination or inspection;

e/ Declining to abide by tax examination or inspection conclusions or enforcement of tax-related administrative decisions of competent bodies.

3. Violations of invoice, voucher regimes for goods transported en route shall be sanctioned as follows:

a/ A fine of between VND 200,000 and 2,000,000, for cases of failing to supply valid invoices or vouchers of lots of transported goods within 12 hours, counting from the time competent bodies inspect and detect violation acts;

b/ A fine of between VND 300,000 and 3,000,000, for cases of failing to supply valid invoices or vouchers of lots of transported goods within 12 to 24 hours, counting from the time competent bodies inspect and detect violation acts;

c/ A fine of between VND 1,000,000 and 5,000,000, for cases of failing to supply valid invoices, vouchers of lots of transported goods after 24 hours, counting from the time competent bodies inspect and detect the violation acts but have not yet issued sanctioning decisions.

If invoices or vouchers can be supplied after tax agencies have issued sanctioning decisions or cannot be supplied after the expiration of the time limit prescribed at this Point, the violators shall be sanctioned for acts of tax evasion; if they can supply vouchers of tax payment for lots of transported goods within the statute of limitations for settlement of complaints, they shall be fined only according to the levels provided for at this Point and not sanctioned for acts of tax evasion.

Article 12.- Sanctioning of acts of delaying tax payment

1. Violations sanctioned for delayed tax payment by taxpayers include:

a/ Paying tax later than schedule, than the extended time limit for tax payment, the time limit stated in tax agencies' notices or decisions on handling of tax-law violations;

b/ Paying tax in deficit due to wrong declaration of tax amounts to be paid, to be exempted, to be reduced or to be refunded of the previous tax declaration periods, but the taxpayers have themselves detected the errors and voluntarily paid the full deficit tax amounts into the state budget before receiving the tax examination or inspection decisions of competent bodies.

2. The fine level is 0.05% of the late paid tax amount for each day, for violations defined in Clause 1 of this Article.

The number of days of delayed tax payment covers public holidays and weekends according to the prescribed regime and is counted from the date following the last day of the tax payment time limit, the extended time limit for tax payment, the time limit stated in notices of handling decisions of tax agencies to the date the taxpayers have voluntarily paid the deficit tax amounts into the state budget.

3. When taxpayers can themselves determine the fine amounts for late tax payment, they shall themselves declare and pay the fine amounts into the state budget according to Clause 2 of this Article.

If taxpayers cannot themselves determine or wrongly determine the fine amounts for late tax payment, tax agencies shall determine the fine amounts for late tax payment and notify them to taxpayers.

4. If within 30 days after the tax payment deadline taxpayers still fail to pay the delayed tax and fine amounts, tax agencies shall notify them of such amounts.

5. Taxpayers are not subject to a fine for delayed payment of outstanding tax in the extended tax payment time limit.

Article 13.- Sanctioning of acts of making incorrect declarations which lead to lower payable tax amounts or higher refundable tax amounts

1. Cases of incorrect declarations, which lead to lower payable tax amounts or higher refundable tax amounts, include:

a/ Acts of making incorrect declarations, which lead to lower payable tax amounts or higher refundable tax amounts, higher exempted or reduced tax amounts, but taxpayers have promptly, fully and honestly noted down economic operations giving rise to tax obligations on accounting books, invoices or vouchers;

b/ Acts of making incorrect declarations by taxpayers, which lead to lower payable tax amounts or higher refundable, exempted or reduced tax amounts, which do not fall into the cases defined at Point a, Clause 1 of this Article, but when they are detected by competent bodies, the violators voluntarily pay the full tax amounts not declared into the state budget before the time tax agencies make tax examination records or tax inspection conclusions;

c/ Acts of making incorrect declarations by taxpayers, which lead to lower payable tax amounts or higher refundable, exempted or reduced tax amounts, for which competent bodies have made tax examination records or tax inspection conclusions confirming false declarations for tax evasion, but if the taxpayers have committed them for the first time with extenuating circumstances and voluntarily paid the full tax amounts into the state budget before the time the competent bodies issue handling decisions, tax agencies shall make records to re-affirm acts of making inadequate tax declarations;

d/ Using invalid invoices or vouchers to account the value of purchased goods or services, thus reducing the payable tax amounts or increasing the refundable, exempted or reduced tax amounts, but when they are detected by tax agencies, the purchasers can prove that the sellers have used invalid invoices and they have made full payment according to regulations.

2. The fine levels for violation acts defined in Clause 1 of this Article are 10% of the tax amounts declared lower or the refundable, exempted or reduced tax amounts higher than the levels prescribed by tax law.

3. Tax agencies determine the deficit tax amounts, fine amounts, the number of days of delayed tax payment, the fine amounts for delayed tax payment and issue decisions to fine taxpayers.

Article 14.- Sanctioning of acts of tax evasion, tax fraud

Taxpayers that commit acts of tax evasion or tax fraud defined in Article 108 of the Law on Tax Administration shall, apart from fully paying the evaded or fraudulent tax amounts, be fined with times calculated on the evaded or fraudulent tax amounts as follows:

1. A fine of one time the evaded or fraudulent tax amounts on taxpayers that commit first-time violations not defined in Article 13 of this Decree or second-time violations involving two or more extenuating circumstances for one of the following acts of violation:

a/ Failing to submit tax registration dossiers; failing to submit tax declaration dossiers or submitting tax declaration dossiers 90 days after the expiration of the tax declaration submission time limit defined in Clauses 1, 2, 3 and 5, Article 32 of the Law on Tax Administration or after the expiration of the extended time limit for tax declaration dossier submission defined in Article 33 of the Law on Tax Administration;

For cases of submitting the quarterly temporarily calculated tax declaration dossiers 90 days later than the general schedule but still within the annual tax settlement dossier submission time limit, a fine shall be imposed not for acts of tax evasion defined in this Article but for acts of tax declaration defined in Article 9 of this Decree.

b/ Failing to supply valid invoices or vouchers or supplying them after the time limit prescribed for goods transported en route;

c/ Using invalid invoices, vouchers to account value of input goods or raw materials, thus reducing the payable tax amounts or increasing the exempted, reduced, deductible or refundable tax amounts;

d/ Carrying out procedures, making dossiers for unreal destruction of supplies or goods, thus reducing the payable tax amounts or increasing the refundable, exempted or reduced tax amounts;

e/ Making goods or service sale invoices with incorrect quantities or value to declare tax amounts lower than actual tax amounts;

f/ Using fake invoices, expired invoices, invoices of other individuals or organizations for goods sale or service provision and failing to declare full payable tax amounts, which, however, do not fall into the cases defined at Points a, b and c, Clause 1, Article 13 of this Decree;

g/ Failing to enter accounting books revenues or expenditures related to the determination of payable tax amounts;

h/ Failing to issue goods or service sale invoices or writing the value on sale invoices lower than the actual payment value of sold goods or services, which are detected after the tax declaration dossier submission time limit;

i/ Using invalid invoices, vouchers to account an unreal value of purchased goods or services, thus reducing the payable tax amounts or increasing the exempted, reduced or refundable tax amounts;

j/ Using tax-exempt goods (including tax-free goods) in contravention of the prescribed purposes without making tax declarations;

k/ Modifying, erasing accounting vouchers or accounting books, thus reducing the payable tax amounts or increasing the refundable, exempted or reduced tax amounts;

l/ Destroying accounting vouchers, accounting books, thus reducing the payable tax amounts or increasing the refundable, exempted or reduced tax amounts;

m/ Using invalid invoices, vouchers or documents in other cases to determine wrong payable or refundable tax amounts.

2. A fine of 1.5 times the evaded or fraudulent tax amounts on taxpayers who commit one of the acts specified in Clause 1 of this Article, if it is a first-time violation involving aggravating circumstances or a second-time violation involving one extenuating circumstance.

3. A fine of 2 times the evaded tax amounts on taxpayers who commit one of the acts defined in Clause 1 of this Article, if it is a second-time violation without extenuating circumstances or a third-time violation involving one extenuating circumstance.

4. A fine of 2.5 times the evaded tax amounts on taxpayers who commit one of the acts defined in Clause 1 of this Article, if it is a second-time violation involving one aggravating circumstance or a third-time violation without extenuating circumstances.

5. A fine of 3 times the evaded tax amounts on taxpayers who commit one of the acts defined in Clause 1 of this Article, if it is a second-time violation involving two or more aggravating circumstances or a third-time violation involving aggravating circumstances or a fourth-time violation onward.

6. The determination of the number of aggravating and extenuating circumstances for application of fine levels specified in Clauses 2, 3, 4 and 5 of this Article complies with the principles provided at Point b, Clause 1, Article 6 of this Decree.

The evaded tax amounts specified in Clauses 1, 2, 3, 4 and 5 of this Clause are the tax amounts which must be paid into the state budget under law but are not paid by taxpayers who commit one of the acts of tax evasion or tax fraud defined in Article 108 of the Law on Tax Administration, which are detected by competent bodies and identified in tax examination records or tax inspection conclusions.

Violation acts defined in this Article, which are detected in or after the tax declaration dossier submission time limit but do not reduce the payable tax amounts or increase the refundable, exempted or reduced tax amounts, shall only be sanctioned for violations of tax procedures.

Section 3. HANDLING OF TAX-LAW VIOLATIONS COMMITTED BY TAX AGENCIES, TAX OFFICERS, BANKS, CREDIT INSTITUTIONS AND RELATED ORGANIZATIONS AND INDIVIDUALS

Article 15.- Handling of tax-law violations committed by tax agencies, tax officers

1. Tax-law violations committed by tax agencies or tax officers shall be handled under the provisions of Articles 112 and 113 of the Law on Tax Administration.

2. The Finance Ministry shall guide the order and procedures of handling tax-law violations committed by tax agencies or tax officers provided for in Clause 1 of this Article.

Article 16.- Handling of violations by commercial banks, other credit institutions, tax payment guarantors

1. Commercial banks and other credit institutions which fail to fulfill their responsibility to deduct tax amounts and tax-law violation fine amounts to be paid at the request of tax agencies from taxpayers' accounts and transfer them into state budget accounts, shall be handled on a case-by-case basis as follows:

a/ Commercial banks or other credit institutions may not be sanctioned if by that time the taxpayers' deposit accounts see no balance or they have transferred the whole account balance of taxpayers into state budget accounts, which are, however, still lower than the tax amounts and the tax-violation fine amounts to be paid by taxpayers;

b/ Commercial banks or other credit institutions shall be handled for violations if by that time, taxpayers' deposit account balance is equal to or greater than the tax and tax-law violation fine amounts to be paid by taxpayers, but such commercial banks or credit institutions fail to deduct all or part equal to the amounts to be paid by taxpayers; within 10 days after the expiration of the time limit for deduction of money from taxpayers' deposit account opened at such commercial banks or credit institutions, tax agencies shall make records of the violations and issue decisions to fine the commercial banks or credit institutions an amount equal to the money amounts not deducted and transferred into state budget accounts. In this case, tax agencies shall also apply measures to fully collect the tax and fine amounts from taxpayers.

2. Tax obligation performance guarantors shall pay tax and fine amounts on behalf of the guaranteed taxpayers if the latter fail to pay tax into state budget accounts or violate tax law.

Article 17.- Handling of tax-law violations by related organizations or individuals

1. Related organizations or individuals that commit acts of colluding with or covering up taxpayers who commit tax evasion or tax fraud, decline to comply with tax-related coercive administrative decisions, depending on the nature and severity of their violations, are subject to a fine of between VND 2,000,000 and 8,000,000. Where their violations show signs of crime, they shall be examined for penal liability according to law.

2. Organizations or individuals that fail to fulfill their responsibilities defined in Articles 89, 98 and 100 of the Law on Tax Administration shall, depending on the nature and severity of their violations, be administratively handled or examined for penal liability according to law.

State treasuries which fail to deduct and transfer taxpayers' tax and fine amounts into state budget accounts at the request of tax agencies shall be sanctioned as in the cases specified at Point b, Clause 1, Article 16 of this Decree.

Section 4. COMPETENCE AND PROCEDURES FOR HANDLING OF TAX-TAX VIOLATIONS AND COMPLIANCE WITH HANDLING DECISIONS

Article 18.- Tax agencies' competence to handle tax-law violations

1. Tax officers on duty have the rights to impose:

a/ Caution;

b/ A fine of up to VND 100,000, for acts of violating tax procedures defined in this Decree.

2. Tax station heads or tax team leaders, within the ambit of their functions and tasks, have the rights to impose:

a/ Caution;

b/ A fine of up to VND 2,000,000, for acts of violating tax procedures defined in this Decree.

3. District-level tax department heads, within geographical areas under their respective management, have the rights:

a/ To serve caution;

b/ To impose fine of up to VND 10,000,000, for violation acts specified in Articles 7, 8, 9, 10 and 11 of this Decree;

c/ To impose fines for violation acts defined in Articles 12, 13, 14, 16 and 17 of this Decree;

d/ To confiscate material evidences and means used for commission of tax-law violations;

e/ To apply remedial measures defined in Clause 3, Article 6 of this Decree.

4. Provincial-level department directors, within geographical areas under their respective management, have the rights:

a/ To serve caution;

b/ To impose a fine of up to VND 100,000,000, for acts of violating tax procedures defined in Articles 7, 8, 9, 10 and 11 of this Decree;

c/ To impose fines for violation acts defined in Articles 12, 13, 14, 16 and 17 of this Decree;

d/ To confiscate material evidences and means used for commission of tax-law violations;

e/ To apply remedial measures defined in Clause 3, Article 6 of this Decree.

Article 19.- Competence of presidents of People's Committees at different levels to sanction tax-law violations

The tax-law violation sanctioning competence of presidents of People's Committees at different levels comply with the provisions of law on handling of administrative violations.

Article 20.- Authorization, division of competence to sanction tax-law violations

The authorization and division of competence to sanction tax-law violations comply with the provisions of law on handling of administrative violations.

Article 21.- Stoppage of violation acts

When detecting tax-law violations, persons competent to handle violations shall issue decisions to immediately stop such violation acts. Stoppage decisions may be made in writing or other forms, depending on specific cases of violation. Where cases of violation do not fall under, or go beyond, their handling competence, violation detectors must make written records thereof in the prescribed form and promptly transfer them to competent persons to issue decisions to stop the violations and proceed with the handling according to this Decree.

Article 22.- Making written records of tax-law violations

The making of written records of tax-law violations is provided for as follows:

1. The competent person who is performing official duty and detects a tax-law violation shall make written a written record thereof in the set form and promptly transfer it to a person with sanctioning competence. Such a record must contain all signatures required by the law on handling of administrative violations; if the violator refuses to sign the violation record, the record maker shall clearly write the reason therefor in the record and take responsibility before law for the contents written in the record;

2. Where the record maker has no sanctioning competence, his/her boss is the person having the sanctioning competence who must also sign his/her name in the record; if necessary, he/her may conduct verification before signing the record;

3. Cases in which records are not required to be made upon issuance of sanctioning decisions:

a/ Tax-law violations committed by taxpayers have been examined, inspected, detected and noted down in examination records or inspection conclusions by tax agencies;

b/ The delayed tax payment by taxpayers have been written in tax agencies' notices on delayed tax and fine amounts.

Article 23.- Time limit for issuance of sanctioning decisions

The time limit for issuance of sanctioning decisions is provided for as follows:

1. For simple cases and manifest violation acts which require no further verification, sanctioning decisions must be issued within 10 days as from the date the records of tax-law violations are made;

2. For cases involving many complicated circumstances where material evidences and means need to be examined, violators or other complicated circumstances need to be clearly identified, the time limit for issuance of sanctioning decisions is 30 days from the date the records are made;

3. Where it deems necessary to have more time to verify and collect evidences, within no more than 10 days after the expiry of the time limit specified in Clause 2 of this Article, the persons with sanctioning competence shall report thereon to their immediate bosses in writing, asking for extension; the extension must be made in writing and the extension duration must not exceed 30 days;

4. Except for decisions to apply the sanctioning form of expulsion, competent persons may not issue sanctioning decisions in the following cases:

a/ The time limit specified in Clause 1 of this Article has expired;

b/ The time limit for issuance of sanctioning decisions, specified in Clause 2 of this Article has expired but the extension thereof is not applied for or the extension has been applied for but rejected by competent authorities;

c/ The extension duration permitted by competent authorities has expired.

Article 24.- Decisions to sanction tax-law violations

Tax-law violation-sanctioning decisions must be made in writing.

The forms, contents, order and procedures for promulgation of tax-law violation-sanctioning decisions comply with the provisions of law on handling of administrative violations.

Article 25.- Exemption from fines for tax-law violations and competent to exempt fines

1. Taxpayers sanctioned for tax-law violations may request exemption from fines for their tax-law violations in cases where they have met with natural calamities, fires, unexpected accidents or other force majeure cases. The maximum fine exemption level does not exceed the value of damaged properties and goods.

2. Dossier of request for exemption from fine for a tax-law violation comprises:

a/ A written request for fine exemption, clearly stating the reason for fine exemption;

b/ Documents determining the value of properties or goods damaged by natural calamities, fires, unexpected accidents or other force majeure circumstances;

c/ The record of inventory of the value of damaged properties or goods, which is made by a lawful representative of organizations or individuals suffering from damage, and jointly examined and certified by police offices or presidents of commune-level People's Committees.

The records of inventory of the damage value must clearly identify the value of damaged properties or goods, the causes of damage, responsibilities of organizations and individuals for the damage; the quantities, categories and value which can be recovered.

d/ The dossier on damage compensation (if any) accepted by an insurer;

e/ Dossiers providing the responsibilities of organizations and individuals to pay damage compensations (if any).

3. Heads of tax agencies shall consider the exemption from fines for tax-law violations when receiving taxpayers' dossiers of request for fine exemption, for cases falling under the handling jurisdiction of their own or their subordinates according to the provisions of law on handling of administrative violations.

4. Tax-law violation fines are not exempted for the cases in which the tax-law violation-sanctioning decisions were completely served or the law-prescribed statute of limitations for settlement of complaints or denunciations has expired.

Article 26.- Compliance with decisions to sanction tax-law violations

Compliance with decisions to sanction tax-law violations is provided for as follows:

1. Unless otherwise provided for by law, sanctioned individuals and organizations must comply with decisions on sanctioning of tax-law violations within 10 days after they are handed over the sanctioning decisions. After issuing sanctioning decisions, persons with sanctioning competence shall hand over the decisions to the sanctioned persons or notify them to come and take the decisions; the time when the sanctioned persons receive the sanctioning decisions is considered the time they are handed over the decisions;

Where individuals are subject to a fine of VND 500,000 or more and are meeting with exceptional economic difficulties, persons competent to issue sanctioning decisions may decide to postpone the compliance with sanctioning decisions for not more than 3 months after the issuance of the sanctioning decisions.

The Finance Ministry shall guide the handling procedures serving as a basis to secure compliance with sanctioning decisions in cases where the sanctioned persons refuse to receive the decisions on sanctioning tax-law violations, and the procedures to postpone compliance with sanctioning decisions as provided for in this Clause.

2. If past one year competent persons cannot hand over the sanctioning decisions to sanctioned persons as the latter fail to come to take them and their addresses cannot be identified or due to other objective reasons, the persons who have issued the sanctioning decisions shall issue decisions to suspend the application of sanctions and remedies stated in the decisions against such persons, except for the form of confiscation of material evidences and means used for commission of tax-law violations; temporarily seized material evidences and means shall be handled under the provisions of law on handling of administrative violations. Expenses for application of these measures are paid with the state budget or deducted from the proceeds from the sale of confiscated material evidences and means (if any).

Article 27.- Decisions on remedies to be taken in cases of non-issuance of decisions on sanctioning tax-law violations

Decisions on remedies must be issued in writing.

The form, contents, order and procedures for promulgation of decisions to sanction tax-law violations must comply with the provisions of law on handling of administrative violations.

Article 28.- Transfer of tax-law violation- sanctioning decisions for compliance

The transfer of tax-law violation-sanctioning decisions is provided for as follows:

1. Where violating individuals or organizations belong to administrative units of one province but reside or are located in another province and have no conditions to comply with the sanctioning decisions at the place of sanctioning, the decisions shall be transferred to the tax agencies at the same level at the places where such individuals reside or such organizations are located for compliance;

1. Where violations occur in districts of mountain provinces, islands or other remote and far-flung areas where travel is difficult and the violating individuals or organizations have no conditions to comply with the sanctioning decisions at the place of sanctioning, the decisions shall be transferred to agencies of the same level with sanctioning decision-issuing agencies at places where those individuals reside or such organizations are located for compliance.

Article 29.- Transfer of dossiers on violators that commit tax-law violations with signs of crime for penal liability examination

1. In the course of handling tax-law violations, if deeming that tax-law violating organizations or individuals show signs of crime, competent persons shall transfer dossiers to competent criminal proceedings-conducting bodies within 10 days after the detection of signs of crime.

2. Where decisions to handle tax-law violations were issued, but later the violation acts are detected as showing signs of crime while the time limit for penal liability examination has not yet expired, the persons who issued the decisions shall cancel such decisions and transfer the violation-handling dossiers to competent criminal proceedings-conducting bodies within 3 days after the cancellation of such decisions.

Tax agencies shall transfer the original dossier sets on tax-law violation cases to legal proceedings-conducting bodies within 5 days after the receipt of notices on decisions to institute the criminal cases.

3. Where tax agencies have transferred dossiers to criminal proceedings-conducting bodies, but within 3 days after the expiry of the time limit for issuance of decisions to institute or not to institute criminal cases under the provisions of Article 103 of the Criminal Procedures Code, the tax agencies have not yet received the notices of agencies competent to examine penal liability on the institution or non-institution of criminal cases, the persons competent to sanction tax-law violations shall issue sanctioning decisions according to the Law on Tax Administration.

Article 30.- Return of violation case dossiers for sanctioning of tax-law violations

1. Where dossiers on tax-law violation cases were transferred to criminal proceedings- conducting bodies, if competent persons of criminal proceedings-conducting bodies find that the violation acts do not show enough signs to constitute offenses, they shall issue decisions not to institute the criminal cases under the provisions of Article 103 of the Criminal Procedures Code. Within 3 days after the issuance of decisions not to institute the cases, the criminal proceedings- conducting bodies shall transfer the decisions on non-institution of the cases together with the violation case dossiers to competent tax agencies for handling of tax-law violations.

2. Where individuals against whom legal proceedings were instituted, prosecution is taken or trial according to criminal procedures is decided, but later decisions are issued to suspend the investigation or suspend the cases, within 3 days after the issuance of decisions to suspend the investigation or suspend the cases, the criminal proceedings-conducting bodies shall transfer such decisions together with the violation case dossiers to competent tax agencies for handling of tax-law violations.

3. After receiving the violation case dossiers as provided for in Clauses 1 and 2 of this Article, the tax agencies with sanctioning competence shall issue sanctioning decisions against all cases under the provisions of Article 23 of this Decree.

Chapter II

ENFORCEMENT OF TAX-RELATED ADMINISTRATIVE DECISIONS

Section 1. GENERAL PROVISIONS ON ENFORCEMENT OF TAX-RELATED ADMINISTRATIVE DECISIONS

Article 31.- Governing scope and subjects of application

1. Governing scope: This Chapter provides for the principles, competence, order and procedures for implementation of provisions on enforcement of tax-related administrative decisions against organizations or individuals beyond the time limit for compliance with or for postponement of compliance with tax-related administrative decisions under the provisions of the Law on Tax Administration, except for the measure of ceasing to carry out customs procedures for imported goods.

Tax-related administrative decisions to be enforced include notices on outstanding tax and fine amounts; notice on assessment of tax amounts; decisions on tax-related administrative sanction; decisions on application of remedial measures under the provisions of law on handling of tax-related administrative violations; decisions on damage compensation; and other tax-related administrative decisions as provided for by law.

2. Subjects of application:

a/ Taxpayers who are coerced to comply with tax-related administrative decisions according to the Law on Tax Administration;

b/ Tax agencies and tax officers that are coerced to comply with tax-related administrative decisions;

c/ Persons who have competence and responsibility to enforce tax-related administrative decisions;

d/ State bodies, organizations and other individuals that are related to the enforcement of tax-related administrative decisions.

Article 32.- Cases of enforcement of tax-related administrative decisions

1. Cases of enforcement of tax-related administrative decisions against taxpayers defined in Article 92 of the Law on Tax Administration.

2. Commercial banks, other credit institutions and tax payment guarantors that fail to comply with decisions on sanctioning of tax-law violations under the provisions of the Law on Tax Administration.

3. Persons who guarantee the performance of tax and fine payment obligations on behalf of taxpayers in cases the latter do not pay tax into state budget accounts or violate the provisions of Clause 2, Article 114 of the Law on Tax Administration.

4. State treasuries which fail to deduct money from violators' accounts for payment into the state budget under tax agencies' decisions on sanctioning of tax-law violations.

5. Related organizations or individuals that fail to comply with competent bodies' decisions on handling of tax-law violations.

Article 33.- Enforcement measures

Measures for enforcement of tax-related administrative decisions include:

1. Deducting money from accounts of violators coerced to comply with tax-related administrative decisions at state treasuries, commercial banks or other credit institutions; requesting blockage of accounts.

2. Deducting part of salaries or incomes.

3. Distraining properties, auctioning distrained properties according to law to collect outstanding tax and fine amounts into the state budget.

4. Collecting money and other assets of violators coerced to comply with tax-related administrative decisions, which are being held by other organizations or individuals.

5. Confiscating material evidences and means used for commission of tax-law violations.

6. Withdrawing tax identification numbers; suspending the use of invoices.

7. Revoking business certificates; establishment and operation licenses, practicing licenses.

Article 34.- Sources of deducted money and distrained properties for organizations coerced to comply with tax-related administrative decisions

Sources of deducted money and distrained properties for organizations coerced to comply with tax-related administrative decisions comply with the provisions of law on handling of administrative violations and other relevant law.

Article 35.- Competence to decide on enforcement

The following persons have the competence to decide on one of the measures for enforcement of tax-related administrative decisions defined in Article 33 of this Decree and the tasks to organize the enforcement of the sanctioning decisions of their own or their subordinates:

1. Heads of tax agencies at different levels have the competence to issue decisions on enforcement of tax-related administrative decisions defined in Clauses 1, 2, 3, 4, 5 and 6, Article 33 of this Decree.

2. Presidents of district- or provincial-level People's Committees have the right to issue decisions on enforcement of decisions on sanctioning of tax-law violations in areas under their charge.

3. Where violators are subject to measures defined in Clause 7, Article 33 of this Decree, the tax agencies handling the cases shall make dossiers, documents, notices and transfer them to competent bodies for handling according to regulations.

Article 36.- Principles for issuance of enforcement decisions and organization of enforcement of tax-related administrative decisions of subordinates

Competent persons defined in Clauses 3 and 4, Article 18 of this Decree have the competence to issue enforcement decisions and organize the enforcement of tax-related administrative decisions of their subordinates in the following cases:

1. The subordinates have no competence to issue enforcement decisions.

2. The subordinates have the competence to issue enforcement decisions but have no conditions in terms of personnel and forces for organization of the execution of enforcement decisions and send written requests to their superiors for issuance of enforcement decisions.

3. The execution of enforcement decisions involves many localities, organizations and individuals.

Article 37.- Enforcement decisions

1. Enforcement of tax-related administrative decisions is carried out only when competent persons defined in Article 35 of this Decree issue decisions to enforce tax-related administrative decisions.

2. A decision on enforcement of a tax-related administrative decision has the following principal contents: date of issue; grounds for issue of the decision; full name, position and unit of the issuer; full name, residence place or head office of the violator; reason and measures for enforcement; time and venue for enforcement; agency assuming the prime responsibility for execution of the enforcement decision; coordinating agency(ies); signature of the issuer; and stamp of the issuing agency.

3. Decisions on enforcement of tax-related administrative decisions must be sent to the violators concerned and related organizations and individuals 5 working days before the enforcement is conducted; enforcement decisions must be sent to immediate superior tax agencies; in cases of enforcement by measures defined in Clause 3, Article 33 of this Decree, the decisions must be sent to presidents of People's Committees of communes, wards or townships where the enforcement is conducted before they are executed.

Article 38.- Responsibilities to organize the execution of enforcement decisions

1. Persons who issue decisions to enforce tax-related administrative decisions have the task to organize the execution of those decisions.

2. People's Committees of communes, wards or townships where the violators stay shall direct related agencies to coordinate with tax agencies in enforcing tax-related administrative decisions.

3. People's police forces have the responsibility to maintain order and safety and support tax agencies in the course of enforcement when so requested by persons who issue decisions on enforcement of tax-related administrative decisions.

4. Organizations and individuals related to violators coerced to comply with tax-related administrative decisions shall coordinate in conducting the enforcement when so requested by enforcement decision issuers.

Article 39.- Statute of limitations for execution of enforcement decisions

1. A decision on enforcement of a tax-related administrative decision is valid for one year from the date of issue.

2. Where violators deliberately shirk or delay compliance with enforcement decisions, the statute of limitations for enforcement is re-counted from the time the shirking or delaying acts terminate.

3. Measures for enforcement of tax-related administrative decisions defined in Clause 1 of this Article will cease to be effective from the time when the tax and fine money has been fully paid into the state budget. The grounds for termination of the effect of tax-related enforcement decisions are vouchers on full payment of tax and fine amounts into the state budget by the violators with certification by state treasuries or agencies permitted to collect tax, commercial banks or other credit institutions that have deducted money from the violators' accounts.

Section 2. ENFORCEMENT BY DEDUCTING MONEY FROM DEPOSIT ACCOUNTS

Article 40.- Violators subject to the enforcement measure of deducting money from deposit accounts

Enforcement by deducting money from deposit accounts applies to individuals and organizations that do not voluntarily comply with sanctioning decisions, remedial decisions or fail to pay enforcement expenses when:

1. The violating individuals deposit money at state treasuries, commercial banks or other credit institutions in Vietnam.

2. The violating organizations deposit money at state treasuries, commercial banks or other credit institutions in Vietnam.

Article 41.- Verification of information on accounts of violators

1. Persons competent to issue enforcement decisions to deduct money from deposit accounts at banks, state treasuries or other credit institutions may gather, verify and request banks, state treasuries, other credit institutions or financial organizations to supply information on accounts and account balances of violating individuals and organizations. At the same time, the persons competent to issue enforcement decisions have the responsibility to keep confidential the information on accounts of violators, which is supplied by banks, other credit institutions or financial organizations.

2. Violators have the responsibility to notify persons competent to issue enforcement decisions of the names of the banks, state treasuries, credit institutions or financial organizations where their accounts are opened, numbers and codes of their accounts at banks, other credit institutions or financial organizations, when so requested.

3. State treasuries, commercial banks or other credit institutions where violators open their accounts shall notify persons competent to issue enforcement decisions to deduct money from accounts of the units where accounts are opened and numbers of accounts of violators when so requested.

Article 42.- Decisions on enforcement by deducting money from deposit accounts

1. A decision on enforcement by deducting money from deposit account must clearly state the date of issue; grounds for issue of the decision; full name, position and working unit of the issuer; deducted money amount (stated in the decision on administrative handling and enforcement expenses calculated up to the end of the 5-day time limit before the enforcement is conducted); reasons for deduction; full name, tax identification number and account number of the violating individual or organization subject to deduction; name and address of the bank, credit institution or financial organization where the violator opens an account; name, address and number of the state budget account opened at the state treasury, mode of transferring the deducted money amount from the bank or credit institution to the state treasury; the enforcement time limit. The decision must contain the signature of the issuer and the stamp of the issuing agency.

2. Decisions on enforcement by deducting money from deposit accounts shall be sent to violating individuals or organizations subject to deduction, state treasuries, banks or other credit institutions where the violating organizations or individuals open their accounts and related bodies 5 days before the enforcement is conducted.

Article 43.- Responsibilities of state treasuries, commercial banks and other credit institutions in Vietnam where violating individuals and organizations open their accounts

1. To supply necessary information on the numbers and balances of accounts opened at their units by violating individuals or organizations within 3 days after receipt of requests of the persons competent to issue decisions to enforce the deduction of money from deposit accounts.

2. To immediately freeze accounts of violators upon receipt of enforcement decisions of competent persons.

3. To transfer money amounts of violating organizations and individuals into the state budget accounts opened at state treasuries stated in the decisions on enforcement of the deduction of tax and fine money, enforcement expenses within 5 days after the receipt of enforcement decisions; at the same time to notify the agencies which have issued the enforcement decisions and the violating individuals or organizations thereof.

4. To notify in writing the agencies which have issued enforcement decisions of the time when the enforcement decisions expire while the money amounts in the accounts of violating individuals or organizations are not enough for deduction for payment into the state budget.

5. Within the time limits for execution of enforcement decisions, if the accounts of violating individuals or organizations see a balance but they fail to deduct it for payment into the state budget under the enforcement decisions, they shall be sanctioned for tax-law violations under the provisions of this Decree.

Article 44.- Procedures for collection of deducted money

1. The deduction of money from accounts of violating individuals or organizations is carried out on the basis of vouchers of collection under current regulations. Collection vouchers used for deduction of money from accounts must be sent to the concerned parties.

2. After collection of money, the state treasuries which receive the deducted money shall notify the persons competent to issue the enforcement decisions thereof.

Section 3. ENFORCEMENT BY PARTIAL SALARY OR INCOME DEDUCTION

Article 45.- Violators subject to enforcement by partial salary or income deduction

The measure of partial salary or income deduction applies to taxpayers coerced to comply with tax-related administrative decisions in the following cases:

1. Violating individuals are public servants or working individuals who enjoy wages or incomes at agencies or organizations under labor contracts with a term of 6 months or longer;

2. Violating individuals enjoy monthly pensions or working capacity loss allowances.

Article 46.- Enforcement decisions on partial salary or income deduction against individuals

1. A decision on enforcement by partial salary or income deduction against an individual must clearly state the date of issue; grounds for the issue; full name, position and working unit of the decision issuer; full name and address of the violating individual; name and address of the agency or organization managing salaries or incomes of the violating individual; the deducted amount (stated in the decision on administrative handling and enforcement expenses calculated up to the end of the 5-day time limit before the date of enforcement), reasons for deduction; name and address of the state treasury receiving the deducted money, mode of transferring the deducted money to the state treasury; the enforcement duration; signature of the decision issuer and stamp of the decision-issuing agency.

2. Enforcement decisions must be sent to violating individuals, agencies or organizations directly managing the salaries or incomes of the violating individuals, and related bodies.

Article 47.- Percentages of partial deduction of individuals' salaries or incomes

1. Only a salary or income part equal to the money amount stated in the sanctioning decisions of competent persons may be deducted.

2. The percentage of deduction of individuals' salaries, pensions or working capacity loss allowances is not lower than 10% and higher than 30% of their respective total monthly salaries or allowances; for other income amounts, the deduction percentage depends on actual incomes but does not exceed 50% of the total income amounts.

Article 48.- Responsibilities of agencies, organizations and employers managing salaries or incomes of violating individuals

Agencies and organizations managing salaries or incomes of violating individuals have the responsibilities:

1. To partially deduct the salaries or incomes of violating individuals and transfer the deducted money amounts into state budget accounts at state treasuries according to the decisions on enforcement of tax-related administrative decisions, from the nearest the salary or income payment period until the time the tax and fine amounts stated in decisions on enforcement of tax-related administrative decisions are fully deducted, and at the same time notify the enforcement decision issuers and the violating individuals thereof;

2. Upon the nearest salary or income payment period, agencies, organizations or persons managing salaries or incomes of violating individuals shall partially deduct salaries or incomes of these individuals according to the enforcement decisions and transfer the deducted money amounts into accounts of the state treasuries stated in the enforcement decisions, and at the same time notify persons competent to issue the enforcement decisions thereof;

3. Where tax and fine amounts are not yet fully deducted under enforcement decisions while the labor contracts of the violating individuals terminate, the employing agencies or organizations must notify the enforcement decision issuers thereof within 5 working days after the labor contracts terminate;

4. Agencies and organizations managing salaries or incomes of individuals coerced to comply with tax-related administrative decisions, which deliberately decline to comply with the enforcement decisions, shall be sanctioned for tax-law violations according to Article 17 of this Decree.

Section 4. ENFORCEMENT BY DISTRAINING PROPERTIES AND AUCTIONING DISTRAINED PROPERTIES

Article 49.-Violators subject to the measure of distraining valuable properties for auction

Individuals and organizations are subject to the measure of distraining properties for auction when they do not voluntarily abide by the sanctioning decisions and fail to pay enforcement expenses, including:

1. Individuals being self-employed laborers without fixed agencies or organizations to manage their wages or incomes;

2. Individuals and organizations that do not have accounts or have money deposited in accounts at banks or credit institutions, which is, however, not enough for application of the measure of partial salary or income deduction or account deposit deduction;

3. Individuals and organizations against whom the enforcement measures specified at Points a and b, Clause 1, Article 93 of the Law on Tax Administration cannot be applied or have been applied but the outstanding tax and fine amounts are not yet fully collected;

4. The measure of distraining properties is not applied to individual taxpayers who are hospitalized.

Article 50.- The following properties may not be distrained

1. For individuals coerced to comply with tax-related administrative decisions:

a/ The only dwelling house of the violating individual and his/her family;

b/ Curative medicines, food, foodstuff in service of essential needs of the violating individual and his/her family;

c/ Necessary common working tools used as main or unique means of livelihood of the individual and his/her family;

d/ Clothing and essential daily-life things of the violating individual and his/her family;

e/ Worshiping objects; relics, orders, medals, diplomas of merit.

2. For production and business establishments:

a/ Curative medicines, means, instruments, assets of medical examination and treatment establishments, excluding assets in circulation for business; food, foodstuff, tools and assets in service of employees' mid-shift meals;

b/ Kindergartens, schools and their equipment, means and tools which are not assets in circulation for enterprises' business;

c/ Equipment, means, tools for labor safety, explosion and fire prevention and fighting, environmental pollution prevention and fighting;

d/ Infrastructure in service of public interests, security and defense;

e/ Raw materials and materials, finished products, semi-finished products which are toxic chemicals not permitted for circulation;

f/ Quantities of raw materials, materials and semi-finished products which are included in the enclosed production chains.

3. For state agencies, political organizations, socio-political organizations, socio-professional organizations (collectively referred to as agencies and organizations), which operate with state budget capital, their assets procured with state budget capital may not be distrained, but those agencies and organizations are requested to file written requests for financial supports from competent bodies for execution of enforcement decisions.

If agencies and organizations earn revenues from other lawful activities, their assets procured with capital from such revenue sources must be distrained for execution of enforcement decisions, excluding the following assets:

a/ Curative medicines, means, instruments and assets of medical examination and treatment establishments, except where these assets are in circulation for business; food, foodstuff, tools and assets in service of mid-shift meals of officials and public servants;

b/ Kindergartens and schools and their equipment, means and instruments, if such things are not assets in circulation for agencies' or organizations' business activities;

c/ Equipment, means and tools for labor safety, explosion and fire prevention and fighting, environmental pollution prevention and fighting;

d/ Working offices.

Article 51.- Decisions on enforcement by property distraint

1. A decision on enforcement by property distraint must clearly state the date of issue; grounds for the issue; full name, position (rank) and working unit of the issuer; full name, residence place of the individual subject to property distraint, head office of the organization subject to property distraint; the fine amount; venue for distraint; signature of the decision issuer and stamp of the decision-issuing agency.

2. Property distraint must be notified to individuals or organizations subject to property distraint, People's Committees of communes where those persons reside or those organizations are located, or agencies employing those individuals 5 days before the enforcement is conducted, except for cases in which the notification may obstruct the distraint.

Article 52.- Property distraint procedures

1. Property distraint must be conducted during daytime and working hours applicable at localities where properties are distrained.

2. Enforcement decision issuers or persons assigned to execute the enforcement decisions assume the prime responsibility for the distraint.

3. When property distraint is conducted, the individuals subject to property distraint or adult members of their families, representatives of organizations subject to property distraint, representatives of local administrations and witnesses must be present.

If individuals coerced to comply with the enforcement decisions or adult members of their families are deliberately absent, the property distraint still proceeds in the presence of representatives of local administrations and witnesses.

4. Individuals and organizations subject to property distraint may suggest property items to be distrained first, and the persons assigned to take charge of the distraint shall accept their suggestions if finding that they do not affect the enforcement.

If individuals or organizations subject to property distraint do not specify which property items to be distrained first, property items under personal ownership must be distrained first.

5. Property jointly owned by individuals subject to property distraint and other persons may be distrained only if the individuals subject to property distraint do not have own property or their own property is not enough for execution of enforcement decisions. Property in dispute may be still distrained and co-owners of the distrained property are given explanations of their rights to initiate lawsuits according to civil procedures.

Agencies conducting the distraint shall publicly notify the distraint time and venue to co-owners. If past the 3-month time limit, counting from the distraint date, no lawsuits are initiated, the distrained property will be auctioned according to the provisions of law on property auction.

6. Within 30 days from the distraining date, if violators coerced to comply with tax-related administrative decisions fail to fully pay the outstanding tax and fine amounts, the tax agencies may auction the distrained property for full collection of the outstanding tax and fine amounts.

Article 53.- Property distraint records

1. Property distraint must be recorded in writing. A record must state the distraint time and venue; full name and position of the person taking charge of the distraint; the representative of the organization subject to property distraint, the individual subject to property distraint or their lawful representatives; witnesses, representatives of local administration (or the agency employing the violating individual); description of conditions and characters of every distrained property.

2. Persons taking charge of distraint; representatives of organizations subject to property distraint, individuals subject to property distraint or their lawful representatives; witnesses; representatives of local administrations (or agencies of individuals subject to property distraint) shall sign the records. If a person is absent or refuses to sign the record, this fact must be written in the record and the reason therefor must be clearly stated.

3. A distraint record must be made in 2 copies, one copy to be kept by the enforcement decision-issuing agency, and one copy to be handed to the individual subject to property distraint or the representative of the organization subject to property distraint immediately after the distraint record is completely made.

Article 54.- Assignment of distrained property for preservation

1. Persons taking charge of the distraint may select one of the following forms for preservation of distrained property:

a/ Assigning the property to the persons subject to property distraint, their relatives or current managers or users of such property for preservation;

b/ Assigning the property under joint ownership to a co-owner for preservation;

c/ Assigning the property to an organization or individual with conditions for preservation.

2. For properties being gold, silver, precious metals, germs, foreign currencies, they may be temporarily assigned to state treasuries for management; for industrial explosives, support tools, objects of historical or cultural value, national treasures, antiques, rare and precious forest products, they may be temporarily assigned to specialized state management bodies for management.

3. When assigning distrained property for preservation, persons taking charge of the distraint shall make a record thereof, clearly stating the date of property handover for preservation; full names of person taking charge of the enforcement, the individual subject to property distraint, the representative of the organization subject to property distraint, the person assigned to preserve the property, witnesses; quantities, conditions (quality) of the property; rights and obligations of the person assigned to preserve the property.

Persons taking charge of the distraint, persons assigned to preserve distrained property, individuals subject to property distraint, representatives of organizations subject to property distraint and witnesses shall sign in the records. Where a person is absent or refuses to sign the record, this fact must be stated in the record together with the reason therefor.

Records shall be handed to persons assigned to preserve distrained property, individuals subject to property distraint, representatives of organizations subject to property distraint, witnesses and persons taking charge of the distraint, each with one copy.

4. Persons assigned to preserve distrained property are entitled to actual reasonable expenses for preservation of the property, excluding those defined at Point a, Clause 1 of this Article.

5. If persons assigned to preserve distrained property let the property decay, be fraudulently exchanged, lost or destroyed, they shall pay compensations and shall, depending on the nature and severity of their violations, be handled according to the provisions of this Decree or examined for penal liability in accordance with the criminal law.

Article 55.- Pricing of distrained property

1. The pricing of distrained property is carried out at the houses of individuals or head offices of organizations subject to distraint or at places where the distrained property is kept (except where a pricing council is required).

2. Distrained property is valued under the agreement between persons taking charge of execution of enforcement decisions and representatives of organizations subject to property distraint or individuals subject to property distraint and co-owners in cases where property under joint ownership is distrained. The time for the parties to agree on prices must not exceed 5 working days from the date the property is distrained.

For a distrained property valued at under VND 500,000 or easy to decay, if the parties fail to reach agreement on its prices, the person competent to issue enforcement decisions shall price it.

3. Where a distrained property is valued at VND 500,000 or more, which is difficult to be priced or the parties cannot reach agreement on its price, within 15 days after the property is distrained, the person who has issued the enforcement decision shall propose a competent body to set up a pricing council with the person who has issued the enforcement decision acting as president, representatives of the finance agency and related professional agencies as members.

Within 7 working days its setting up, the pricing council shall conduct the pricing. Individuals or representatives of organizations that are subject to property distraint may contribute their opinions to the pricing, but the right to decide the prices belongs to the pricing council.

The pricing of property is based on market prices at the time of pricing. For property with prices controlled by the State, the pricing is based on prices set by the State.

4. The pricing of property shall be made in a written record, clearly stating the time and venue of pricing, participants in the pricing, names and values of the priced property; it must contain signatures of all pricing participants and property owner.

Article 56.- Competence to set up property pricing councils

1. Presidents of district-level People's Committees shall decide to set up pricing councils for cases of administrative enforcement under the jurisdiction of state management bodies at district or commune level.

2. Presidents of provincial-level People's Committees shall decide to set up pricing councils for cases of administrative enforcement under the jurisdiction of state management bodies at provincial level.

3. The setting up of pricing councils at central agencies shall be decided by heads of the managing ministries after reaching agreement with the Finance Minister and concerned ministries and branches.

Article 57.- Tasks of a pricing council

1. To study and propose the organization and agenda of its meetings.

2. To prepare documents necessary for the pricing.

3. To conduct the pricing.

4. To make a record of pricing.

Article 58.- Transfer of distrained property for auction

1. For property distrained for auction, based on the property value determined under the provisions of Article 55 of this Decree, within 30 days after the issue of distraint decisions, the persons taking charge of the enforcement shall sign contracts on auction authorization with organizations having the auctioning function to organize auction of the property according to the following regulations:

a/ For distrained property valued at under VND 10,000,000 each, the person taking charge of the enforcement shall sign an auction authorization contract with the district-level finance agency to organize the auction;

b/ For distrained property valued at over VND 10,000,000 each, the person taking charge of the enforcement shall sign a auction authorization contract with the provincial-level auction service center to organize the auction.

2. The Finance Minister shall guide the determination of reserve prices for auction of property defined at Points a and b, Clause 1 of this Article.

3. Transfer of distrained property to agencies responsible for auction must be recorded in writing, Such a record must clearly state the date of transfer; the transferor and transferee; signatures of transferors and transferees; quantities and conditions of the property. A dossier of handover of distrained property to the agency responsible for the auction comprises: the decision on coercive distraint; papers and documents relating to ownership rights, lawful use rights (if any); property pricing documents, and the record of the property handover.

4. Where distrained property is cumbersome or in a great quantity, which the provincial-level auction service center or district-level finance agency has no place to store, after the completion of handover procedures, it may sign a property preservation contract with the current keepers of the property. Expenses for performance of a preservation contract are paid from the proceeds from the auction of the property.

5. When distrained property is transferred to an agency responsible for auction, the procedures for auction of such property are carried out under the current provisions of law on auction.

6. For property under joint ownership, when it is auctioned, sale priority is given first to its co-owners.

7. Where the proceeds from auction are greater than the sum stated in the sanctioning decisions plus enforcement expenses, within 10 days from the date of auction, the agency taking the measure of distraining property for auction shall carry out procedures to return the difference to the violating person or organization concerned.

Article 59.- Transfer of property ownership rights

1. Distrained property buyers have their ownership rights to such property recognized and protected by law.

2. Competent state agencies shall carry out procedures for transfer of ownership rights to the buyers in accordance with law.

3. A dossier on transfer of ownership rights comprises:

a/ A copy of the decision on administrative enforcement by distraining property for auction;

b/ The property auction record;

c/ Other papers related to the property (if any).

Section 5. ENFORCEMENT BY COLLECTING MONEY AND PROPERTY OF VIOLATORS WHICH ARE BEING HELD BY OTHER ORGANIZATIONS OR INDIVIDUALS

Article 60.- Scope of application of the enforcement measure of collecting money and property of violators which are being held by a third party

The collection of money and property of violators which are being held by other organizations or individuals (hereinafter referred to as a third party) is applied when the following conditions are fully met:

1. Tax agencies cannot apply the enforcement measures defined at Points a, b and c, Clause 1, Article 93 of the Law on Tax Administration or have applied such measures but fail to fully collect the outstanding tax and fine amounts;

2. Tax agencies have grounds to determine that the third party is owing a debt amount to, or holding money and property of the violator.

Article 61.- Principles for collection of money and assets from third parties that are holding the property of violators

1. The third parties owe due debts which must be paid to the violators or are holding money, property or goods of the violators.

2. Where money and property of coerced violators, which are being held by the third parties, are objects of secured transaction or fall into cases of bankruptcy settlement, the collection of money and assets from the third parties must comply with the provisions of law.

3. Money amounts which the third parties have paid into the state budget on behalf of the violators are determined as sums already paid for the coerced violators.

Based on vouchers of collection of money and assets from the third parties, agencies competent to conduct enforcement shall notify the violators and related agencies thereof.

Article 62.- Responsibilities of third parties that are owing debts to or holding money and assets of violators

1. To supply tax agencies with information on debt amounts or money amounts or assets of violators which they are holding, clearly stating the money amounts, the debt payment time limit, types, quantity and conditions of property.

2. Upon receipt of written requests of tax agencies, not to return money and property to the violators until they pay the money into the state budget or transfer property to tax agencies for carrying out procedures for auction.

3. If they cannot comply with the requests of tax agencies, they must send written explanations to the tax agencies within 5 working days, counting from the date of receiving the written requests of tax agencies.

4. Organizations and individuals that are owing debts to or holding money and assets of violators liable to enforcement of tax-related administrative decisions but fail to pay the tax amounts for the violators within 15 days counting from the date of receiving written requests of tax agencies, are subject to enforcement measures defined in Clause 1, Article 93 of the Law on Tax Administration.

Section 6. ENFORCEMENT BY WITHDRAWING TAX IDENFICATION NUMBERS, SUSPENDING THE USE OF INVOICES; REVOKING BUSINESS REGISTRATION CERTIFICATES OR ESTABLISHMENT AND OPERATION LICENSES, PRACTICING LICENSES

Article 63.- Order of enforcement

1. Enforcement measures provided for in this Section are applied when tax agencies have applied the enforcement measures defined at Points a, b, c and d, Clause 1, Article 93 of the Law on Tax Administration but still fail to fully collect the outstanding tax and fine amounts.

2. When applying enforcement measures defined in this Section, competent state management agencies shall publicly announce such on the mass media.

Article 64.- Enforcement by withdrawing tax identification numbers, suspending the use of invoices

Heads of tax agencies at all levels may apply the enforcement measures of withdrawing tax identification numbers and suspending the use of invoices according to the provisions of Article 94 of the Law on Tax Administration. When applying these enforcement measures, heads of tax agencies at all levels shall notify the violators thereof within 3 working days before withdrawing their tax identification numbers and issue decisions on withdrawal of tax identification numbers or decisions on suspension of the use of invoices within 10 days counting from the date of handing notices to the violators.

Article 65.- Enforcement by revoking business registration certificates or establishment and operation licenses, practicing licenses

When applying the enforcement measure of withdrawing business registration certificates, establishment and operation licenses or practicing licenses against taxpayers, tax agencies shall send written requests to competent state management bodies for revocation of business registration certificates, establishment and operation licenses or practicing licenses within 3 days counting from the date of identifying the violators subject to the enforcement measure.

Within 10 days after receiving the notices of tax agencies, competent state management bodies must issue decisions to revoke business registration certificates, establishment and operation licenses or practicing licenses or notify the tax agencies of the non-revocation thereof.

Chapter III

IMPLEMENTATION PROVISIONS

Article 66.- Implementation effect

1. This Decree takes effect on July 1, 2007. Where treaties to which the Socialist Republic of Vietnam is a contracting party contain provisions on handling of tax-law violations and enforcement of tax-related administrative decisions different from those of this Decree, the provisions of such treaties prevail.

2. To cancel the Government's Decree No.100/2004/ND-CP of February 25, 2004, on sanctioning of tax-law violations.

3. Tax-law violations committed before the effective date of this Decree shall be handled under the provisions of law effective at that time.

Where the sanctioning level prescribed in this Decree for the same act is lighter than the sanctioning level prescribed in legal documents promulgated before the effective date of this Decree, the sanctioning level prescribed by this Decree is applied, including the cases where violation acts have been recorded in writing but competent bodies have not yet issued handling decisions or have issued the handling decisions but within the statute of limitations for lodging complaints.

4. Other issues in the handling of tax-law violations and enforcement of tax-related administrative decisions which are not defined in this Decree comply with the provisions of law on handling of administrative violations and other relevant laws.

Article 67.- Guidance for and organization of implementation

The Finance Ministry shall guide and organize the implementation of this Decree and coordinate with state bodies, political organizations, socio-political organizations, social organizations and socio-professional organizations in propagating, educating and mobilizing people to implement and supervise the implementation of this Decree.

Article 68.- Implementation responsibility

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial/municipal People's Committees, and relevant organizations and individuals shall implement this Decree.